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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (67901)	8/10/2006 10:41:15 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

You can easily compare the SAME house by looking at its price history -- it does not take much of a brain to see an enormous jump in prices over time for the SAME house. Agreed. And it does not take much of a brain to see that prices are falling like a rock in many places now. Centex and other builders are cutting prices by $100,000 or more on a $400,000 home. Poof 25% off overnight. That is a serious adjustment. Interestingly enough, no one wants to buy them. If you want to call those prices rises inflation then you should be calling these latest drops deflation. I say the former was speculation and the latter is collapse of a bubble. Was that bubble caused by an inflationary cash is trash environment? Yes, it sure was. The aftermath will be an environment where cash is not trash. Mish

To: GST who wrote (67901)	8/10/2006 11:23:35 AM
From: Tommaso	Read Replies (2) \| Respond to of 110194

>>>You can easily compare the SAME house by looking at its price history -- it does not take much of a brain to see an enormous jump in prices over time for the SAME house.<<< Yes. In 1947 my parents bought a house--really two houses--built in 1927 at a cost that I do not know, but probably more than they paid--say, $50,000. They got the houses--both--for $23,000 because of the effect of the Depression and World War II and the location. My mother sold the houses in about 1976 for $108,000. The next buyer sold about ten or fifteen years later for about $500,000. I think the house sold again recently for over a million. We bought our house in 1977 for $56,000. We could sell it for $350,000. Some decline in house prices is possible and, I think, likely. General deflation is extremely unlikely. Loss of purchasing power of the dollar is extremely likely.